Form 1096
Form 1096: Essential Guide for First-Time Business Filers [2025 Update]
Did you know that failing to file your 1096 form correctly could cost your business up to $530 per form in penalties? Form 1096, officially known as the “Annual Summary and Transmittal of U.S. Information Returns,” serves as a critical cover sheet when submitting various information returns to the IRS by mail.
However, this form is only required when filing paper returns—electronic submissions don’t need it. Specifically, if your business has paid $600 or more to freelancers or independent contractors during the calendar year, you’ll likely need to submit this form. Each type of information return, including 1099, 1098, and W-2G forms, must be accompanied by a separate Form 1096 when filed by mail.
In this comprehensive guide, we’ll walk through everything first-time business filers need to know about the 1096 tax form. We’ll cover when it’s required, how to fill it out correctly, important deadlines (which vary by form type), and how to avoid those costly penalties. Additionally, we’ll explain why the IRS requires a specific red ink version for paper submissions and where to obtain these official forms.
What is IRS Form 1096 and When Is It Required?
Form 1096 officially titled “Annual Summary and Transmittal of U.S. Information Returns” serves a specific purpose in the tax reporting ecosystem. Let me explain exactly what this form is and when you need to use it as a business owner or employer.
Definition of Form 1096 as a transmittal form
Form 1096 functions as a transmittal document—essentially a cover sheet—that accompanies specific information returns when filing them with the IRS by mail. Unlike other tax forms that report specific income details, the 1096 form merely summarizes the information contained in the accompanying returns.
Think of the 1096 tax form as a summary page that tells the IRS what’s included in your paper submission. It consolidates key information such as:
- The total number of forms being submitted
- The total amount reported on those forms
- Your business identification details
- The type of forms being transmitted
This summary helps the IRS process and organize the various information returns they receive. Moreover, each different type of information return requires its own separate Form 1096. For instance, if you’re submitting both 1099-NECs and 1098s, you’ll need to complete two different 1096 forms—one for each type.
When Form 1096 is used for paper filing only
A crucial point to understand about the 1096 form is that it’s only required for paper submissions. If you file your information returns electronically through the IRS FIRE (Filing Information Returns Electronically) system, you don’t need to submit Form 1096 at all.
Furthermore, if you need to file 10 or more total information returns, electronic filing becomes mandatory, thus eliminating the need for Form 1096. This requirement makes the form primarily relevant to smaller businesses with fewer reporting obligations.
The types of returns that require Form 1096 when filed on paper include:
- Form 1097 (Bond Tax Credit)
- Form 1098 (Mortgage Interest Statement)
- Form 1099 series (including 1099-NEC and 1099-MISC)
- Form 3921 (Exercise of Incentive Stock Option)
- Form 3922 (Transfer of Stock)
- Form 5498 (IRA Contribution Information)
- Form W-2G (Gambling Winnings)
An important technical requirement is that Form 1096 must be scannable by the IRS, which means you can’t simply download and print it from the internet. Instead, you must order the official scannable form directly from the IRS.
Difference between Form 1096 and Form W-3
First-time business filers often confuse Form 1096 with Form W-3, as both serve as transmittal forms. While similar in concept, they accompany entirely different types of tax documents.
Form 1096 is used for transmitting information returns related to non-employee compensation and other reportable transactions. In contrast, Form W-3 serves as the transmittal form for W-2 forms, which report employee wages and taxes.
Simply put, we can think of Form 1096 as the “independent contractor version” of Form W-3. Both forms summarize information for the IRS, but they cover different types of payments:
- Form 1096 summarizes payments to non-employees (contractors, vendors)
- Form W-3 summarizes wages paid to employees
Another distinction is the recipient of these forms—while you send copies of W-2s and 1099s to both the IRS and the individuals who received payments, you only send Form 1096 to the IRS. Independent contractors never receive copies of Form 1096.
Understanding these distinctions helps ensure you comply with your business tax filing obligations correctly and avoid unnecessary penalties.
Who Must File Form 1096 in 2025
Understanding exactly who needs to file Form 1096 in 2025 remains a common source of confusion for many businesses. Let me clarify exactly which businesses need to submit this form and under what circumstances filing is required.
Businesses filing 1099, 1098, 3921, 3922, 5498, or W-2G by mail
Primarily, Form 1096 serves as a mandatory cover sheet for businesses submitting paper versions of information returns to the IRS. The types of businesses required to file this form include any person or entity submitting any of these paper information returns:
- Form 1097 (Bond Tax Credit)
- Form 1098 (Mortgage Interest Statement)
- Form 1099 series (including 1099-MISC and 1099-NEC)
- Form 3921 (Exercise of an Incentive Stock Option)
- Form 3922 (Transfer of Stock Acquired Through an Employee Stock Purchase Plan)
- Form 5498 (IRA Contribution Information)
- Form W-2G (Certain Gambling Winnings)
Notably, you must submit a separate Form 1096 for each type of information return you’re filing. For example, if you’re submitting both 1099-MISC and 1099-NEC forms, you’ll need to complete two different 1096 forms—one for each type.
Thresholds for filing: $600+ payments to contractors
The requirement to file information returns (and consequently Form 1096) typically triggers when your business makes payments above certain thresholds. For most businesses, the key threshold is $600 or more paid to non-employees during the tax year.
Generally, anyone who hires contractors and pays each one $600 or more during the year must file a Form 1099 on their behalf. Subsequently, if filing these forms on paper, a Form 1096 must accompany them as a transmittal document.
The IRS is particularly strict about matching your business information across forms. Your name and taxpayer identification number (TIN)—either your employer identification number (EIN) or social security number (SSN)—must match the name and TIN used on your 94X series tax returns. Otherwise, you may face information return penalties.
Exemptions for electronic filers
The most significant exemption relates to electronic filing. If you submit your information returns electronically through the IRS FIRE System or tax preparation software, you do not need to complete or file Form 1096 at all. This is because the electronic system automatically compiles and transmits the summary information to the IRS for you.
Effective January 1, 2024, the e-file threshold has been significantly lowered. Currently, if you need to file 10 or more information returns (calculated by aggregating all information returns), you’re required to file electronically. This change applies to all information returns required to be filed in 2025 for the 2024 tax year.
Given this reduced threshold, many small businesses that previously filed paper returns with Form 1096 will now be required to file electronically, thereby eliminating their need to file Form 1096 altogether.
Nevertheless, businesses filing fewer than 10 information returns still have the option to file by paper, in which case Form 1096 remains mandatory. For those businesses, understanding the proper completion and submission of this form is essential to avoid penalties and ensure compliance with IRS requirements.
Pay close attention to the deadlines, as they vary by form type—January 31, 2025, for Form 1099-NEC, February 28, 2025, for most other forms, and May 31, 2025, for Form 5498.
How to Fill Out a 1096 Form: Step-by-Step Instructions
Filling out Form 1096 correctly is critical for proper IRS compliance. Though seemingly simple, this single-page document requires attention to detail. Let me walk you through each step of completing this essential transmittal form.
Box 1 and 2: EIN or SSN requirements
When completing Form 1096, you must choose between entering your Employer Identification Number (EIN) in Box 1 or Social Security Number (SSN) in Box 2—never both. According to IRS guidelines:
- If you have an EIN, even as a sole proprietor, enter it in Box 1
- If you’re an individual not in a trade or business, enter your SSN in Box 2
- Sole proprietors without an EIN must use their SSN in Box 2
The identification number you use on Form 1096 must match the one used on your information returns.
Box 3: Number of forms submitted
Box 3 requires the total number of forms being transmitted with this particular Form 1096. Initially, this may seem straightforward, but there are specific rules to follow:
- Enter the count of forms, not pages
- Do not include blank or voided forms in your total
- Do not count the Form 1096 itself
For instance, if you’re submitting a page containing three Forms 1098-E but only two are completed correctly, you would enter “2” in Box 3.
Box 4: Federal income tax withheld
In Box 4, enter the sum of all federal income tax withheld as shown on the forms accompanying this particular Form 1096. If no federal income tax was withheld on any of the attached forms, simply enter “0” in this box.
Box 6: Marking the correct form type
Box 6 is where you indicate exactly what type of information return you’re transmitting. Remember that each Form 1096 can accompany only one type of information return. Accordingly, if you’re filing both 1099-MISC and 1099-NEC forms, you must complete two separate 1096 forms—one for each type.
Place an “X” in only one box to indicate the specific form type being filed. The form contains codes for numerous information returns including W-2G, 1098, 1099 series, 3921, 3922, and 5498 forms.
Signature and submission guidelines
Finally, the form requires your signature, title, and date at the bottom. This signature certifies under penalty of perjury that you’ve examined the return and accompanying documents, and to the best of your knowledge, they are true, correct, and complete.
For submission, send forms in a flat mailing (not folded), grouped by form number with each group accompanied by its own Form 1096. Never include a form containing summary information with your Form 1096, as summary details should only appear in boxes 3, 4, and 5 of Form 1096 itself.
Form 1096 Filing Deadlines and Penalties
Meeting IRS deadlines for your 1096 form is crucial to avoid costly penalties. Different information returns have varying deadlines, so tracking these dates carefully helps maintain compliance.
January 31 deadline for 1099-NEC
The 1096 form accompanying Forms 1099-NEC must be filed by January 31, 2025. This deadline applies regardless of whether you file on paper or electronically, making it one of the earliest tax form deadlines for businesses. Since this form reports non-employee compensation to independent contractors, the IRS prioritizes early submission to verify income and combat tax fraud.
February 28 deadline for most forms
For most information returns, including Forms 1097, 1098, 1099 (except 1099-NEC), 3921, 3922, and W-2G, the paper filing deadline is February 28, 2025. Whenever the filing deadline falls on a weekend or legal holiday in Washington D.C., the due date shifts to the next business day.
May 31 deadline for Form 5498
Form 5498, which reports IRA contributions, has a later deadline of May 31, 2025. This extended timeframe accommodates taxpayers making IRA contributions until the tax filing deadline.
Late filing penalties: $60 to $310 per form
The IRS imposes tiered penalties based on how late you file:
- Within 30 days of deadline: $50.63 per form
- 31 days late through August 1: $109.69 per form
- After August 1 or not filed: $278.46 per form
These penalties apply to each information return and each payee statement you fail to file correctly. Consequently, a small business with just 10 late forms could face penalties exceeding $2,700 if filed after August.
Intentional disregard penalty: $630 per form
If the IRS determines you’ve intentionally disregarded filing requirements, the penalty jumps significantly to $556.91 per form for 2025. Unlike other penalties, there is no maximum limit for intentional disregard penalties.
Although you can request an automatic 30-day extension using Form 8809, this extension isn’t automatically granted for Forms W-2 and 1099-NEC. Therefore, marking these critical deadlines on your calendar prevents potentially significant penalty expenses for your business.
Where to Get and Submit IRS 1096 Form
One critical aspect of 1096 form submission that businesses often overlook is the requirement for official IRS-approved forms. Here’s what you need to know about obtaining and submitting these documents properly.
Ordering scannable forms from IRS
First and foremost, you must use official IRS scannable forms when submitting Form 1096 by mail. To obtain these forms, visit www.IRS.gov/orderforms. Once there, click on “Employer and Information Returns,” and the IRS will mail you the forms you request along with their instructions. Alternatively, you can call 1-800-TAX-FORM to request these documents by phone. The forms typically arrive within 10 days after the IRS processes your order.
Some business owners also visit their local IRS Taxpayer Assistance Center (TAC) to pick up forms in person. Checking the TAC office locator on IRS.gov helps identify the nearest location with available forms.
Why printed PDFs are not accepted
Due to scanning requirements, the IRS explicitly prohibits filing forms printed from their website. The official printed version is specifically designed to be scannable, whereas downloaded copies lack the necessary formatting. If you submit a downloaded copy, the IRS may impose penalties for filing information returns that cannot be scanned properly.
This requirement exists because the IRS uses automated scanning technology to process these forms efficiently. Forms without the proper formatting, color, and paper quality interfere with this process.
Mailing addresses based on business location
Your specific mailing address depends entirely on your principal business location or legal residence. The IRS divides submission addresses into three regional groups:
- For businesses in Alabama, Arizona, Arkansas, Delaware, Florida, Georgia, Kentucky, Maine, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Texas, Vermont, or Virginia: Mail to Internal Revenue Service, P.O. Box 149213, Austin, TX 78714-9213.
- For businesses in Alaska, Colorado, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Utah, Washington, Wisconsin, or Wyoming: Mail to Internal Revenue Service Center, P.O. Box 219256, Kansas City, MO 64121-9256.
- For businesses in California, Connecticut, District of Columbia, Louisiana, Maryland, Pennsylvania, Rhode Island, or West Virginia: Mail to Internal Revenue Service Center, 1973 North Rulon White Blvd., Ogden, UT 84201.
Chiefly, remember to send the form in a flat mailer without folding it to preserve scannability.
Conclusion
Form 1096 serves as a critical piece in the tax compliance puzzle for businesses filing paper information returns. Throughout this guide, we’ve covered the essential aspects of this transmittal form that business owners must understand to maintain IRS compliance.
First and foremost, remember that Form 1096 applies exclusively to paper filers submitting information returns like 1099s and 1098s. Electronic filers need not worry about this form at all. Additionally, the recent reduction in the e-filing threshold to just 10 forms means fewer businesses will need to file Form 1096 in 2025.
Deadlines certainly matter when it comes to Form 1096 submissions. January 31, 2025, marks the cutoff for 1099-NEC forms, while February 28 applies to most other information returns. Missing these deadlines can result in penalties ranging from $50 to over $550 per form, depending on how late you file.
The proper completion of Form 1096 requires attention to detail. You must use your correct EIN or SSN, accurately count the forms submitted, and mark only one box indicating the type of form being transmitted. Perhaps most importantly, you must use official IRS scannable forms rather than printed PDFs from the internet.
Filing tax forms correctly the first time saves businesses both time and money. Though Form 1096 appears straightforward, the potential penalties for incorrect filing can add up quickly. Armed with this knowledge, you can approach your business’s tax obligations with confidence and precision, thereby avoiding costly mistakes and maintaining good standing with the IRS.
FAQs
Q1. What is Form 1096 and when do I need to file it? Form 1096 is a transmittal form used when submitting paper information returns to the IRS. You need to file it if you’re submitting forms like 1099, 1098, or W-2G by mail. However, if you file electronically or have fewer than 10 forms to submit, you don’t need to use Form 1096.
Q2. How do I correctly fill out Form 1096? To fill out Form 1096 correctly, enter your EIN in Box 1 or SSN in Box 2 (not both), indicate the number of forms submitted in Box 3, enter any federal income tax withheld in Box 4, and mark the correct form type in Box 6. Remember to sign, date, and provide your title at the bottom of the form.
Q3. What are the deadlines for filing Form 1096? The deadlines vary depending on the type of information return. For 1099-NEC forms, the deadline is January 31, 2025. Most other forms, including 1098 and 1099-MISC, are due by February 28, 2025. Form 5498 has a later deadline of May 31, 2025.
Q4. Where can I get the official Form 1096? You must use official IRS scannable forms for Form 1096. These can be ordered from the IRS website or by calling 1-800-TAX-FORM. Printed PDFs from the internet are not accepted and may result in penalties if submitted.
Q5. What are the penalties for late filing of Form 1096? Penalties for late filing range from $50 to $278 per form, depending on how late the submission is. If filed within 30 days of the deadline, the penalty is $50 per form. After August 1 or if not filed at all, the penalty increases to $278 per form. Intentional disregard can result in a penalty of $556 per form.
